Hack 21 Refund a Payment 
Return payments to your customers without
doubling up PayPal's fees.
No
one likes to have to return a
payment; the fact that keeping money is better for business
isn't rocket science. Sometimes, however, refunds
are unavoidable: a buyer might need to cancel an order, a seller can
run low on inventory, or a purchased item might not work out as
planned. Fortunately, PayPal makes refunding payments easy.
PayPal also allows you to make partial refunds. This can be handy
when a dispute with your buyer is just about the
item's price. If a buyer believes the condition of a
used item is not as good as expected, you might offer to
refund 20%
of the purchase price as compensation. Your buyer will have the
option to accept or decline your refund offer.
To refund a payment:
Log in to your PayPal account and click History. Scroll through or search your account history and find the payment
you need to refund, and click the corresponding Details link. Near the bottom of the Transaction Details page, click the Refund
Payment link. On the Refund Offer page, fill in the amount of the refund you want
to make, or leave the default amount to make a full refund. Fill in a
note to your buyer if necessary, and then click Submit. On the Confirm Refund Offer page, check the details of the
transaction and click Process Refund when you're
done.
The payment will then show up in your account history with the status
Refunded.
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PayPal lets you make and receive payments, so you might wonder why
you would want to bother issuing a refund when you can simply make
another payment back to the person who paid you originally.
First, if you refund a payment, the person who originally paid you
will see the status of that payment as Refunded rather than
Completed. This might prevent the confusion that otherwise might
arise if the buyer has to reconcile the original sent
payment with a separate received
payment.
Second, when you refund a payment, you'll get all
the PayPal seller fees back. If you refund a $10
payment, for which 59 cents in fees were incurred, your customer will
get a refund of $10 and you'll get a credit to your
account for 59 cents. If you were to send a separate payment for that
same $10, PayPal would charge each of you the 59 cents in fees.
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When working with refunds, keep this in mind:
You may offer a refund only for a limited time, usually 60 days. If
you need to make a refund after that time, you will need to initiate
a new PayPal payment to your buyer. If you offer the buyer a partial refund, she has 10 days to decline
it if she wishes. (Full refunds are automatically processed.) As with
most eCommerce, good communication with your customer can be
especially helpful here; discuss the partial refund with your buyer
to make sure she will be satisfied and will not decline it. Be sure you know where the funds are coming from; the Refund Offer
page provides information about this. If the money will be
transferred from your bank account, be sure there are sufficient
funds there to cover the refund.
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